Choy Lau
- Legal Director
- Employment
Employment Rights Bill – Key amendments update
As the Employment Rights Bill (“ERB”) advances through the legislative process, the House of Lords has proposed further changes to the Bill.
In our view, some changes will likely be accepted, while others may face opposition when the ERB returns to the House of Commons.
Below is a summary of the most important changes and their implications for employers and their workforce:
1. Ban on NDAs Silencing Harassment or Discrimination Claims
Employers will no longer be able to prevent employees from making allegations or disclosures about discrimination or harassment they have experienced or witnessed at work. Clauses in employment contracts or settlement agreements that stop workers from reporting workplace harassment or discrimination will be void. Some exceptions to the NDA ban will exist, but the details will be set out in future regulations.
Notably, the ban currently does not cover complaints about a failure to make reasonable adjustments, victimisation or third party harassment, which can still be kept confidential.
Impact: Employees will be able to report discrimination without fear of breaching an NDA. However, without the assurance of confidentiality, employers may be less inclined to enter into settlement agreement discussions to resolve conflicts on a commercial basis, especially if they are confident that they will be able to successfully defend the claim at Tribunal. As an unintended result, individuals who have experienced discrimination may need to pursue lengthy and expensive Tribunal proceedings to seek redress. Nonetheless, this amendment has been largely welcomed.
This amendment is Government-backed, so it is expected to pass into law but it is not known when the ban will come into effect.
2. Fire-and-Rehire: Stricter Limits
The controversial “fire and rehire” practice—dismissing employees for refusing contract changes and rehiring them on new terms— whilst largely banned in the original ERB, will now only cover certain contract amendments, such as:
- reducing an employee’s pay;
- changing how pay is determined;
- cutting hours or time off;
- changing pension arrangements;
- introducing flexibility clauses to change terms related to the above.
If an employee is dismissed for refusing contract changes outside these categories, Tribunals will apply the usual fairness test. However, the amended ERB says they must consider factors like business reasons, whether employees were consulted, and steps taken to reduce the impact on employees (such as, offering compensation for agreeing to new terms).
The Government has also closed a loophole in the original ERB: it will now be automatic unfair dismissal if employers fire staff and replace them with agency workers or contractors to avoid the new rules.
An exception to the restricted fire-and-rehire rules applies if the employer can prove contractual changes are essential to prevent the business from going under, with no reasonable alternative available. For public-sector employers, a new exception now applies when financial difficulties affect their ability to conduct statutory duties (since they cannot go out of business), and for local authorities if financial difficulties lead to a ‘relevant intervention direction’.
Impact: The original fire and rehire provisions have been reduced so employers can make changes outside the listed categories. Employers should review existing contracts and approach contractual changes carefully, before the law takes effect in October 2026.
The Lords supported the strengthened protections, and since these changes are backed by the Government, they are likely to remain in the ERB.
3. Unfair Dismissal Qualifying Period
The Government pledged to make unfair dismissal protection a “day one right”. Instead of the 2-year service requirement, the ERB proposes an “initial period of employment” (likely 6 – 9 months) where simpler dismissal rules will apply, after which employees will gain full unfair dismissal rights. This still gives employees earlier protection but allows employers a short window for streamlined dismissals.
In a dramatic turn, the House of Lords removed the Government’s concept entirely and instead reduced the qualifying period from 2 years to 6 months. This amendment was led by opposition peers who felt the Government’s proposal was overly complex.
Impact: If this amendment remains, it would still mark a monumental shift in UK employment law, significantly enhancing job security for employees. Employers, would lose a substantial degree of flexibility. With only 6 months to assess the suitability of employees, employers might need to accelerate performance management or be more cautious in hiring.
However, since this amendment clashes with the Government’s manifesto promise, it’s very likely the Commons will reverse the Lords’ 6-month proposal and the Lords will ultimately yield to the original plan. Under the “Salisbury Convention”, the Lords are expected to defer to the Commons on this manifesto policy. These changes to unfair dismissal are expected in 2027. Employers should prepare by ensuring procedures to assess performance at an early stage and sufficient management training is in place.
4. Enhanced Family Leave Rights
Parental Bereavement Leave will now cover pregnancy loss before 24 weeks. Currently, bereavement leave applies to loss of a child after 24 weeks’ onwards.
Impact: Employers should update their policies once the changes are implemented (expected in 2027) and ensure managers are trained to offer compassionate support.
This change was Government-backed, so it sailed through the Lords. It aligns with the manifesto commitment to improve family rights and is certain to remain.
5. Rights for Zero-Hours and Low-Hours Workers
Zero-hours and irregular hours workers will be able to request guaranteed hours. In the original ERB, employers had to offer these automatically.
The original ERB allowed workers compensation if a shift was cancelled or changed at short notice. Under the amendments, if 48 hours’ notice is given, no compensation is owed, giving employers more flexibility.
Additionally, any guaranteed-hours contract offered to an agency worker must meet a pay parity requirement to prevent employers from offering them a permanent role at lower wages.
Moreover, if the agency worker accepts the offer, they will obtain ‘worker’ status. This would be a very interesting change which would allow agency workers to qualify for certain employment rights, but employment status would still depend on overall working arrangements.
Impact: It is important to note that not all these proposed amendments are backed by the Government. Therefore, we will need to wait and see what will become law.
6. Whistleblowing
Amendments have been proposed to overhaul whistleblower protections, including the creation of an “Office of the Whistleblower” and new penalties for retaliating against whistleblowers.
However, these were not Government-backed and are unlikely to become law.
Impact: Employers should maintain robust whistleblowing policies. The fact this was debated suggests whistleblowing laws may be revisited in the future.
Next Steps for Employers
This ERB is and remains a substantial update to UK employment law, the biggest in years. Preparation is key. Employers should audit their policies and practices now, especially in light of these most recent changes and identify where they conflict with the new rules. Where possible, consider implementing some of the changes early as a matter of best practice and start training managers early on to ensure they are aware of the new rights employees will have and how this will impact their role.
Please get in touch if you have any questions about these developments or if you need assistance updating your contracts and policies.
Meet the team:
George Cornell
- Solicitor
- Employment
